Tax, budget issues extend NC legislative session

Published 12:00 am Monday, July 8, 2013

RALEIGH (AP) — Republicans who control the North Carolina General Assembly have work to do before they can adjourn this year’s session feeling they’ve fully carried out their agenda.
While some GOP policy priorities already have passed or are sure to reach Gov. Pat McCrory’s desk in the session’s final weeks, others appear likely to get pushed back until next spring’s “short session” — or beyond.
The greatest uncertainty revolves around an overhaul of the state’s tax system that Republicans pledged to carry out this year after decades of failure to pass something similar when Democrats held the majority.
Although the Senate passed an updated tax proposal last week that agreed with the House’s proposal in several areas, big sticking points remain, such as whether to reduce or eliminate the corporate income tax, and whether to retain or reduce sales-tax refunds for hospitals, universities and charities.
Without a tax deal in place that can be used to project expected revenues, the House and Senate didn’t get a budget passed before the state fiscal year began July 1. Now budget negotiations have braked and it’s unclear whether a deal will be in place before a stop-gap spending measure expires July 31.
A tax overhaul is “a complicated, difficult issue that takes time to work through,” said Sen. Pete Brunstetter, R-Forsyth, co-chairman of the Senate Appropriations Committee. “I feel fairly confident that if tax reform were not on the table, we would have been done.”
Outside sources are building pressure upon legislative Republicans to wrap up their work for the year soon, with or without sweeping tax changes.
McCrory, who would be asked to sign budget and tax bills into law, has said he wants lower income tax rates passed this year. But he’s suggested publicly he could soon run out of patience with legislators in forming a tax plan. Several million dollars in potential Medicaid cost savings are lost every two weeks the budget is late.
And every extra week longer legislators work in Raleigh means one more opportunity for GOP opponents to hold “Moral Monday” protests against the Republicans’ policies. The protests already have led to nearly 700 arrests. The Senate’s decision last week to quickly pass abortion legislation has emboldened a new wave of demonstrators, adding to already negative publicity for Republicans.
“More and more citizens will show up,” said House Minority Leader Larry Hall, D-Durham. “They will be heard.”
Two years ago, when Republicans took control of the legislature for the first time in 140 years, Democratic Gov. Beverly Perdue used her veto stamp to block part of the agenda. That included a bill requiring photo identification to vote in person.
Now with McCrory as the first GOP governor in 20 years and Republicans expanding their majorities in the House and Senate, the GOP has pressed for a more far-reaching agenda. Early examples came this year when GOP legislative leaders and McCrory pushed through laws that reduced or eliminated unemployment benefits and refused to expand Medicaid to cover hundreds of thousands of uninsured people through the Affordable Care Act.
Voter ID, which already passed the House in April, is now likely to pass and receive McCrory’s signature to become law. Senate Rules Chairman Tom Apodaca said his chamber’s version should be rolled out this week.
Differences between competing House and Senate legislation on fracking and offshore energy exploration, as well as on expanding the locations in which permitted concealed weapons could legally be stored, are significant and may be difficult to resolve. Bills designed to keep closer tabs on immigrants living in the country illegally, retool several regulatory commissions and resolve a multimillion-dollar land dispute with the city of Raleigh have lost legislative momentum.
The Senate and House also have passed budgets with significant policy decisions that may not survive in negotiations. The Senate plan would eliminate the current job-protecting tenure rules for public school teachers, while the House wants to give scholarships to children in low-income families to pay for private school.
“We have quite a number of things to be discussed,” said Rep. Nelson Dollar, R-Wake, senior co-chairman of the House budget panel.
McCrory may halt a Senate bill that would ease some restrictions approved in 2007 that were designed to prevent large landfills from being built in eastern North Carolina. Although McCrory’s Department of Environment and Natural Resources endorsed the bill, which is now in the House, the governor said recently he wasn’t sure the bill would pass this session.
Veto-proof majorities mean legislative Republicans could ignore McCrory if they were united. The House and McCrory have joined together on several issues this year, with the Senate on the opposing side.
As for the governor, he appears on track to get most of his policy initiatives approved by the General Assembly. They include changes to state employee personnel laws, permission to create a Medicaid overhaul proposal and authority to begin shifting Commerce Department duties to a private nonprofit corporation. He’s already signed into law transportation funding formula changes he wanted.

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